Veoh Safe Harbor ruling could help YouTube in Viacom battle

A federal judge ruled yesterday that video-sharing site Veoh qualifies for a …

Do user-generated content (UGC) companies like YouTube and Veoh qualify for "safe harbor" protection under the DMCA, or can they be held financially liable for not cracking down harder on copyrighted material uploaded to their servers?

That absolutely key question has been the basis for Viacom's $1 billion lawsuit against YouTube, while video host Veoh has also come under legal assault from Universal and separately by porn producer Io. A federal judge ruled yesterday on the matter in the Io case, saying that Veoh does indeed qualify for a Digital Millennium Copyright Act safe harbor. But Viacom says its case will continue regardless.

Get our porn off your site

The Io case was filed way back in 2006 after Io found that clips from ten of its films had been uploaded to Veoh. Rather than send a DMCA takedown notice to the site, however, Io just went ahead and sued. Like many content owners, it doesn't want to be put in the position of policing its copyrights and thinks that sites like Veoh need to do more. But the DMCA protects sites like Veoh from this kind of charge... or does it?

To qualify for safe harbor, the DMCA sets out several conditions. Companies must function as "service providers," they must not interfere with "standard technical measures" used to thwart piracy (read: DRM), and they must terminate accounts of repeat infringers.

It's the last bit that Io is challenging; it says that Veoh's policies for booting infringers aren't tough enough. An Io VP illustrated this by signing up bogus accounts using free e-mail addresses that were created with fake names. According to Io, it's just too simple to create new accounts, even after being blocked. Instead, Io believes that UGC companies need to track real names or IP addresses.

Not even a federal judge would buy this idea. The judge recognized that "forcing" people to give real names online was an exercise in futility, and after a bit of Wikipedia browsing (I kid you not), the judge concluded that IP addresses could be shared among multiple users, so that idea was out, too.

(The judge also consulted Wikipedia to better understand what "Flash" might be, and he concluded that it is "the name of a file format used to transmit videos over the Internet." Remember, kids, Wikipedia is only good enough for the federal judiciary to make precedent-setting legal decisions, not for your term papers.)

In addition, Veoh can't profit by the infringement in question, it can't have "actual knowledge" of infringement on its site, and it can't be in control of the copyrighted files (these must be stored "at the direction of a user"). Io said that Veoh's automated Flash conversion utilities meant that the content was in fact not stored at the direction of a user after all, but by Veoh, but the judge would have none of it.

In the end, the judge found that Veoh adddressed DMCA complaints quickly, had banned more than 1,000 repeat infringers, and qualified for safe harbor protection. This means that Io could still win an infringement case, but the only remedy would be an injunctive. Since Veoh already removed all "adult" material several years ago, injunctive relief is a moot question. Veoh wins.

In his conclusion, Judge Howard Lloyd said that the DMCA wasn't meant to "have Veoh shoulder the entire burden of policing third-party copyrights on its website (at the cost of losing business if it cannot). Rather, the issues is whether Veoh takes appropriate steps to deal with copyright infringement that takes place... Veoh has met its burden in establishing entitlement to safe harbor for the alleged infringement here."

Whither YouTube?

According to Viacom, this changes nothing in its case against YouTube. In a statement sent to Ars, Viacom said, "Even if the Veoh decision were to be considered by other courts, that case does nothing to change the fact that YouTube is a business built on infringement that has failed to take reasonable measures to respect the rights of creators and content owners. Google and YouTube have engaged in massive copyright infringement—conduct that is not protected by any law, including the DMCA.”

But given that YouTube follows many of Veoh's same procedures and has since added more-aggressive tools such as video fingerprint-based filtering and music matching, yesterday's decision certainly doesn't make Viacom's case any easier.

What it does do is sound a ringing endorsement of the basic principle that UGC sites can, in fact, count as "service providers" under the DMCA. While there's still plenty to argue about in every particular case, that general reassurance will be comforting to everyone in the Web 2.0 world.

Further reading:

If you have PACER access to the federal courts, the case is 5:06-cv-03926, filed in the Northern District of California